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The human cost, economic cycle, interest rate...Ten years of change will affect the hospitality industry

Date: 2018-08-27

Ten years ago, the hotel industry situation is not good, but since then, the hotel industry will enjoy the unprecedented demand environment, the demand environment continue to promote the performance today.

Intercontinental hotels group performance strategy and planning, vice President of Isaac Collazo the summit (Hotel Data Conference), published in the "10 years of Data + two industry analysts = insight into the current industry trends" speech pointed out that the current environment in the Hotel industry is unique in history."We are living in an unprecedented demand environment."

Collazo, meanwhile, it is pointed out that, although in some areas, both geographically and in terms of size chain, the influence of the new supply is more obvious than in other areas, but the supply growth in the hospitality industry is relatively low.

According to Hotel News Now, the parent of STR data, intercontinental and small underground market and rural attracted most of the new property.In terms of increased supply in the past ten years, in the high-end and high-end is the focus of the scale of chain growth category.

STR accommodation industry observation, senior vice President of Jan Freitag, points out that from a macro point of view, he wasn't worried about supply.

Collazo, said construction labor market tension limit the new hotel supplies, but, he says, intercontinental and other continue to announce publicly listed hotel group "refresh" signed a new hotel, so assuming good supply growth will remain indefinitely, it may be unsafe.

He said: "because of the market on other variables, such as Labour costs and scarcity, this phenomenon is slowing down.""I'm not sure how this will continue."

But Freitag, points out that there are encouraging signs that supply may continue to reduce, because STR has been traced to unconfirmed room decline in the channel.

The current environment

Is the question of ten years ago by a deep and trouble caused by the global recession, this kind of recession in the early twentieth century had since the great depression.Instead, today's economic indicators must be more positive, in the second quarter gross domestic product (GDP) growth rate reached 4.1%, its highest level in nearly four years, the unemployment rate hovers around 4% in June, corporate profits increased by 4.9% at the point of the year.

Collazo said: "we are a great place, we have not seen for a period of time that growth."

Freitag, however, pointed out that the current growth "may not be able to continue," Collazo, points out that must be "sometime" is expected to appear in the economic downturn, especially when the industry is celebrating RevPAR growth in 100 consecutive months (more) now.

But these long-term attention does not mean that the hotel operator should not enjoy the good times now.

Collazo said: "we will accept."

Although the indicators such as low unemployment is a good sign of demand continues to grow, but there are still obvious business challenges.

Collazo, said: "the unemployment rate is very low, this means that the more we build, the more difficult it is to find staff.This is we should pay attention to a number."

Freitag would contend that unemployment is a major concern of "absolute", because it brought a lot of pressure to wage growth.

The end of the cycle?

As long periods of strong performance and some reason for optimism continued to move forward, Collazo and Freitag questioned the status quo of the U.S. hotel industry will be considered a new cycle of accommodation stage rather than the end of fairness.

Collazo said, he finally agreed to the assessment."If you're looking at indicators...Everything is moving in the right direction."

He pointed out that, according to the industry sales beds per capita than any time in history, and oil to drive the market rebound again further stimulate demand growth, but in recent years, due to weak demand, low oil prices and new drilling oil driven market rebound lagging behind.According to the data of STR, as of the end of June, including Texas and many famous oil market, the United States are in a leading position in terms of demand growth in the Midwest.